How does the adjustment for depreciation differ from other deferral adjustments? Multiple Choice The depreciation adjustment results in an increase to a long-lived asset account, while the other deferral accounts References The depreciation adjustment uses a contra-asset account rather than reducing the asset account directly The depreciation adjustment increases a liability account rather than reducing an asset account directly The depreciation adjustment is not a deferral adjustment, but rather on accrual adjustment.

How does the adjustment for depreciation differ from other deferral adjustments? Multiple Choice The depreciation adjustment results in an increase to a long-lived asset account, while the other deferral accounts References The depreciation adjustment uses a contra-asset account rather than reducing the asset account directly The depreciation adjustment increases a liability account rather than reducing an asset account directly The depreciation adjustment is not a deferral adjustment, but rather on accrual adjustment.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter12: Nonrecognition Transactions

Section: Chapter Questions

Problem 3DQ

See similar textbooks

Similar questions

Bonus depreciation reduces the adjusted basis of property in the same manner that regular MACRS depreciation does. True or false.
Allowable depreciation reduces the basis of an asset whether the depreciation is deducted or not. Group of answer choices True False
If an adjustment includes an entry to Accumulated Depreciation, which type of adjustment is it? A. accrual B. deferral C. estimate D. cull
For financial accounting purposes, depreciation expense represents the decreasein an asset's fair market value. Select one: True False The total amount of depreciation taken over the life of a depreciable asset should be less if the double-declining balance depreciation method is used than if the straight-line method is used. Select one: True False
Which of the following statements is correct with respect to the sale of a depreciable asset? Multiple Choice A gain occurs when the selling price exceeds book value. A sale for a gain results in a decrease in total assets. A sale for a loss results in an increase in total assets. A loss occurs when the selling price is more than book value.
Which of the following is a false statement regarding revaluation of PPE?A. Revalued amount is either fair value or depreciated replacement cost.B. If simultaneous revaluation is not possible, revaluation can be done on arolling basis provided revaluation of the class of assets is completed withina short period of time and provided the revaluations are kept up to date.C. The difference between the PPE’s carrying amount and its revalued amount isknown as revaluation surplus and should be presented in the statement ofcomprehensive income, net of applicable tax.D. When an asset's carrying amount is increased as a result of revaluation, theincrease shall always be credited to revaluation surplus regardless of theexistence of previous impairment loss recognized. Which of the following should be included as cost of inventory?A. Depreciation expense of the delivery equipment.B. Depreciation expense of the factory machinery.C. Storage cost of finished goods.D. None from the choices. In…
Question 1 Which of the following is not correct in relation to the reversal of an impairment loss of an individual asset? If the individual asset is recorded under the cost model, then the increase in the carrying amount is recognised immediately in profit or loss. Where the recoverable amount is less than the carrying amount of an individual asset, the reversal of a previous impairment loss requires adjusting the camying amount of the asset to recoverable amount. When reversing an impairment loss, the carrying amount cannot be increased to an amount in excess of the carrying amount that would have been determined had ne impairmert los been recognised. O For a depreciable asset there needs to be a calculation of carrying amount using the depreciation variables applied before the impairment loss to determine what the carrying amount would have been if there had been no impairment loss.
When using the revaluation model of accounting for PP&E assets (asset-adjustment or elimination method), a new depreciation rate must be calculated. depreciation continues to be charged in the original pattern. the related Accumulated Depreciation account is closed to OCI. the difference between fair value and book value is always debited to Revaluation Surplus (OCI).
Occasionally, events occur that change an asset's value after purchase. Which of the following is true regarding these changes in value? a.Increases in asset value are recognized.b.Reductions in asset value are recognized.c.Both decreases and increases are recognized.d.Neither decreases nor increases are recognized.
Which of the following statements about depreciation is not true? A. Depreciation does not mirror the actual loss of value over time. B. Depreciation is the allocation of the asset’s cost to expense over the expected years of use. C. If the fair value of the asset increases, depreciation is reversed to reflect the change in value. D. U.S. GAAP requires depreciation methods to be systematic and rational.
Depreciation is a process of asset valuation where an asset's book value (cost less accumulated depreciation) often approximates it fair value. Do you agree or disagree? Explain why or why not.
Why is depreciation added to Net CAPEX? A To adjust CAPEX for taxable income B To isolate changes due to buying or selling of CAPEX с To reflect the economic value of the fixed assets